Obama Promotes Mortgage Plan While Pressuring Congress

A man rides a horse by an abandoned home on October 21, 2010 in Las Vegas. Photographer: Spencer Platt/Getty Images

Oct. 25 (Bloomberg) -- President Barack Obama said he will
take executive action to move ahead with his economic proposals
while keeping up pressure on Congress to act on his broader
package of tax cuts and spending.

In Nevada, the state with the highest foreclosure rate,
Obama yesterday promoted an initiative by the Federal Housing
Finance Agency to let qualified homeowners refinance mortgages
regardless of how much their houses have dropped in value.

With the president on a three-day trip to Nevada,
California and Colorado, the administration also plans to
outline measures to help veterans find jobs and help students
manage education loans.

“We can’t wait for an increasingly dysfunctional Congress
to do its job,” Obama said in Las Vegas outside the home of Jose
and Lissette Bonilla after talking with them about housing
values. “I’ve told my administration to keep looking every
single day for actions we can take without Congress.”

He criticized Republican presidential candidates for
failing to recommend anything to improve the economy while
favoring cutting back on environmental regulations and keeping
tax cuts for the wealthiest Americans.

Campaign Mode

The president was in full campaign mode yesterday, holding
babies and small children after talking to a family in a Las
Vegas subdivision. He made an unannounced stop to shake the
hands of unsuspecting customers at Roscoe’s House of Chicken and
Waffles in Los Angeles -- and ordered chicken wings -- before
attending two fundraisers.

Obama is heading into the 2012 election year with the
nation’s unemployment rate stalled at 9.1 percent in September
and the White House Office of Management and Budget forecasting
it will average 9 percent. The sagging housing market is a drag
on growth, which the administration projects will be 2.6 percent
next year.

“Probably the single greatest cause of the financial crisis
and this brutal recession has been the housing bubble that burst
four years ago,” Obama said. “And as long as this goes on, our
recovery can’t take off as quickly as it would after a normal
recession.”

To help revive the housing market, the FHFA will enhance
the Home Affordable Refinance Program, or HARP, by eliminating
some fees, reducing others and waiving some risk for lenders.
The agency is lifting the previous limit on aid to homeowners on
mortgages no greater than 125 percent of the value of the
property.

On-Time Payments

To qualify, borrowers must be making on-time payments on
loans owned or guaranteed by Fannie Mae or Freddie Mac, the
mortgage-finance firms placed under U.S. conservatorship in 2008.

About 11 million borrowers owe more on their mortgages than
their homes are worth. HARP was started in 2009 with a goal of
reaching 5 million borrowers. As of August, fewer than 895,000
borrowers have been helped. That number could double by the end
of 2013 under the expanded program, according to an FHFA
projection.

Mortgage lenders welcome the modification to the program,
said David H. Stevens, president and chief executive officer of
the Mortgage Bankers Association in Washington. “These changes
alone should encourage lenders to more actively participate.”

Referendum on Obama

Republicans are seeking to make the presidential election a
referendum on Obama’s handling of the economy. He is countering
by accusing opponents in Congress of blocking measures that
would help spur hiring and economic growth.

“Last week, for the second time this month, Republicans in
the Senate blocked a jobs bill from moving forward,” Obama said
in Las Vegas. “It was paid for, and it was supported by an
overwhelming majority of the American people. But they still
said no.”

Senate Minority Leader Mitch McConnell has said the
president got most of what he wanted when Democrats controlled
the House and Senate during the first two years of his
administration and it didn’t work.

“Their policies are in place,” the Kentucky Republican
said on CNN’s “State of the Union” program on Oct. 23. “And
they are demonstrably not working.”

Opposing Jobs Plan

Alluding to McConnell yesterday, Obama said Republicans may
be opposing his jobs plan “because I’m the one that’s
sponsoring it.”

Obama won the three states he is visiting and all have a
higher unemployment rate now than they did when he took office.
While California has been reliably Democratic in the last five
presidential elections, Colorado and Nevada are swing states
that went Republican in 2000 and 2004. Nevada has the highest
home foreclosure and unemployment rates, 13.4 percent, in the
country.

“He’s going to those states where Democrats have been
valued in the recent election; he’s hoping the appeal of 2008
can be rekindled,” said Julian Zelizer, a professor of history
and public affairs at Princeton University in New Jersey. “It’s
more hostile territory at this point. If he felt confident, he
wouldn’t have to go back.”

Obama also is seeking to raise at least $5 million with six
fundraisers during the trip. He also will make an appearance
today on NBC’s “The Tonight Show with Jay Leno.”

Las Vegas Fundraiser

His first campaign stop yesterday was the Bellagio Hotel
for an event where ticket prices started at $1,000. In addition
to the Las Vegas fundraiser, Obama attended two more events last
night in Los Angeles.

One was at the Hancock Park home of film producer James
Lassiter where tickets went for $35,800, according to a
Democratic Party official.

Obama told approximately 40 guests, including Earvin
“Magic” Johnson, the former Los Angeles Lakers star turned
entrepreneur, actor Will Smith and his wife actress Jada Pinkett
Smith, and singer and actress Hillary Duff, that he’s gotten
“about 60 percent” of what he’s wanted accomplished. “That’s
not bad for three years because I need another five.”

Obama then went to the home of actress Melanie Griffith for
another fundraiser with about 120 people. Tickets for the event
started at $5,000, the party official said.

Once there, Obama talked about the Bonillas, who came to
the U.S. as undocumented workers, got legal status through an
amnesty program and raised three children in a one-bedroom
apartment before buying a house. Efforts to overhaul immigration
policy by granting residency to certain younger illegal
immigrants stalled a year ago.

‘Have to Fight’

“We are going to have to fight to make sure that
immigration reform is a reality,” Obama told an audience that
included Los Angeles Mayor Antonio Villaraigosa and Labor
Secretary Hilda Solis. “In order to get it done, we’ve got to
have the same determination, the same focus, the same hard-headedness, the same passion that that family I saw in Las Vegas
today has.”

Since taking office, Obama has visited California 10 times
and almost every stop has included a fundraiser. On Sept. 25-26,
he went to fundraisers at the home of Facebook Inc. Chief
Operating Officer Sheryl Sandberg, Symantec Corp. Chairman John
W. Thompson and two star-studded fundraisers in West Hollywood.

The campaign also has fundraisers scheduled in San
Francisco and Denver.